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Current US Supreme Court Cases Could Have Major Implications for FDA Activities


NEW YORK – A pair of cases currently before the US Supreme Court could have major implications for the US Food and Drug Administration (FDA) and other regulatory bodies.

While the cases themselves — Loper Bright Enterprises v. Raimondo and Relentless, Inc. v. Department of Commerce — do not involve the FDA, they challenge a longstanding legal principle known as the "Chevron doctrine," under which the courts have generally deferred to regulatory agencies' interpretations of ambiguously written laws.

Many observers expect the Supreme Court in its rulings on these cases to either overturn or limit Chevron, which could curtail regulators' authority to interpret unclear statutes and implement regulations according to those interpretations.

In the case of the FDA, a ruling that scaled back Chevron could impact various agency decisions, such as around classification of products or what products fall within the scope of its authority. Perhaps most immediately, such a ruling could have implications for the agency's efforts to regulate laboratory-developed tests, which is widely expected to meet with legal challenges from the lab industry.

The significance of Chevron with regard to the FDA is uncertain, however, with legal experts that 360Dx interviewed offering a range of opinions on the matter.

A pair of editorials published last month in the Journal of the American Medical Association raised concerns that the end of Chevron could meaningfully disrupt the FDA's operations. For instance, Sahil Agrawal, Joseph Ross, and Reshma Ramachandran, doctors at Yale University and the authors of one of the editorials, argued that in the absence of Chevron, courts "could be asked to review de novo [FDA] decisions … such as whether a cholesterol-reducing agent is a drug or a dietary supplement."

Legal challenges of FDA decisions, the authors suggested, could "lead to inconsistent rulings in different jurisdictions," creating confusion and uncertainty that would negatively impact both industry and customers.

They noted that the agency regularly issues "new or revised regulations" in response to "new evidence-based treatment practices and changing needs of stakeholders," and that curtailing its authority to interpret the sometimes "open-ended and ambiguous provisions" that govern its operations could impinge its responsiveness to these needs.

In the second editorial, Daniel Aaron, a doctor and professor at the S.J. Quinney College of Law at the University of Utah, and Avery Emery, a law student at S.J. Quinney, raised similar concerns and noted two recent cases in lower courts — Catalyst Pharmaceuticals, Inc. v. Becerra and Genus Medical Technologies LLC v. FDA — that they said provide examples of FDA losses when courts decline "to defer under Chevron to longstanding FDA precedents." The former case concerned a dispute over orphan drug exclusivity while the latter concerned whether a barium sulfate contrast agent was a device or a drug.

Michael Shumsky, a director with law firm Hyman, Phelps & McNamara, questioned, however, the importance of Chevron to the decisions in these cases.

He said that while both the Catalyst Pharmaceuticals, Inc. v. Becerra case and Genus Medical Technologies LLC v. FDA were "Chevron-based decisions," their outcomes did not depend on whether the Supreme Court preserves that doctrine.

“In those cases, the courts determined that the statute clearly precluded FDA from doing what it was doing," he said. "Even without Chevron, the courts would have reached the same result because they found no ambiguity in the statute to even think about deferring to."

Discussing the Catalyst case, James Boiani, an IVD, drug, and medical device life sciences attorney at Epstein, Becker & Green in Washington, D.C., agreed that "the court in that case looked at the text of the law and said, 'OK, well, there, clearly FDA exceeded the text.'"

He noted, however, that the question of a law's clarity can itself be a matter of interpretation.

"There's always gray area in how clear the language is," he said. "There's a school of thought, and I've argued it too, that 'This is what the text says, it's very clear,' but it's not always very clear."

Given this reality, weakening courts' deference to regulatory agencies' "could have a big impact" on the FDA and the industries it regulates, Boiani said.

Precisely estimating that impact is difficult given that the "FDA is losing different cases on different grounds all the time," he said. "But it is still a weakening."

Shumsky said he does not expect the reversal or narrowing of Chevron to have a major impact on the bulk of the FDA's work.

"The basic decisions that FDA makes on a regular basis are grounded not so much in an interpretation of unclear or ambiguous statutory language but instead on matters of safety and effectiveness," he said. "I don't think that those decisions are going to suddenly become more vulnerable or more heavily scrutinized."

Shumsky allowed that changes to Chevron could impact certain higher-level FDA decisions — questions, for instance, of the agency's authority or whether particular types of products are devices or drugs. He contrasted these questions with the agency's day-to-day work of determining whether particular products are safe and effective.

Boiani similarly suggested that the initial legal challenges in a post-Chevron world would likely target these higher-level decisions. He said, however, that he could also see challenges to the "more granular level" of the FDA's work, such as questions of the standards the agency uses for assessing substantial equivalence or for determining what review pathway a product should go through.

Boiani said that another potential factor in how the curtailment of Chevron could play out is that clinical labs and LDTs will (assuming the FDA's final rule on LDTs is implemented) soon be pulled into the agency's orbit. He suggested that these players may be more likely than traditional in vitro diagnostic firms to aggressively and frequently challenge the FDA legally, given that they are less invested in the agency's existing regulatory framework.

"There are certainly legal challenges" from IVD companies, Boiani said, but often these firms try to work with the agency and Congress to negotiate more favorable interpretations of rules.

"The IVD companies that have been in the space a long time have grown up around FDA's interpretation of the regulations," he said.

Clinical labs, on the other hand, "are not as invested in that process and haven't grown up in that process, and so I think they are a lot more likely to say, 'Well, we'll just sue,'" Boiani said.

With regard to the FDA's rule on LDTs specifically, Shumsky, who said that he believes the Supreme Court "is unlikely to abandon Chevron wholesale," does not see the rule as hinging significantly on Chevron issues. He said that it is more likely to turn on the Supreme Court's "major questions" doctrine, which requires that an agency seeking to implement new, far-reaching regulation has clear statutory authority to do so.

He suggested that the FDA's LDT rule is unlikely to pass muster under this doctrine as it is both expected to have a major impact on the lab industry and is not clearly rooted in the relevant statute, the Federal Food, Drug, and Cosmetic Act (FDCA).

Shumsky also noted that when applying the major questions doctrine, the court commonly looks at whether an agency is "newly asserting statutory authority based on a statute that has been on the books for a long time but which has never been applied in the context the agency is now applying it," as well as whether Congress has ever considered giving the agency explicit authority over what it is seeking to regulate.

The FDA's case for LDT oversight is questionable on both counts. Regarding the first, the agency waited for decades before asserting it has authority under the FDCA to regulate LDTs and has largely chosen not to exert such authority since then. As for the second, Congress has repeatedly considered giving the FDA explicit authority over LDTs (most recently via the Verifying Accurate Leading-edge IVCT Development (VALID) Act) but has not done so.

Taking the opposite view, Cara Tenenbaum, principal at consulting firm Strathmore Health Strategy and formerly a senior policy adviser at the FDA, raised the idea that were Chevron discarded, the agency might actually be required to regulate LDTs as opposed to operating under enforcement discretion.

"I think there's actually a colorable argument that FDA is not allowed to but is required to regulate the things that Congress says it should regulate, including" LDTs, she said. "FDA has said these more historically simple tests that are called LDTs are under enforcement discretion, and I think there is an argument to be made … that without Chevron there could be no enforcement discretion."